Whitehaven Coal Limited · ASX:WHC
Whitehaven Coal — FY2024 Earnings Presentation
56 slides from Whitehaven Coal's earnings presentation, Aug 22, 2024
Slide 1: Whitehaven Coal Limited Full Year Results FY24
Whitehaven Coal Limited Full Year Results FY24 22 August 2024 Authorised for release by the Board of Whitehaven Coal Limited Investor contact Media contact Kylie FitzGerald Michael van Maanen +61 2 8222 1155, +61 401 895 894 +61 8222 1171, +61 412 500 351 kfitzgerald@whitehavencoal.com.au mvanmaanen
Slide 2: Contents and Disclaimer
Contents Disclaimer This presentation contains information in a summary form and does not purport to be complete. It is qualified by any other information 1. Key highlights that Whitehaven discloses to the ASX. • Safety & environment FORWARD LOOKING STATEMENTS Statements contained in this material,
Slide 3: 1. Key highlights
1. Key highlights
Slide 4: Excellent safety and environment performance in FY24
Excellent safety and environment performance in FY24 WHC recorded a NSW TRIFR for employees WHC had ZERO environmental enforceable and contractors of 3.3 for FY241, a 30% action events in FY241, consolidating the improvement on 4.7 delivered in FY23 significant improvement on recent years 25 24.5 Mt
Slide 5: FY24 highlights
FY24 highlights FINANCIAL RESULTS • Transformational acquisition of QLD metallurgical coal assets completed $3.8b revenue (including $869m from QLD in Q4) on 2 April 2024 $1.4b underlying EBITDA (incl $272m from QLD in Q4) • Strong QLD production in Q4 following $740m underlying NPAT safe and succes
Slide 6: Announced sale of 30% of Blackwater for US$1.08b
Announced sale of 30% of Blackwater for US$1.08b Whitehaven executed binding agreements with Nippon Steel and JFE Steel for the sale of 30% of Blackwater Highlights ▪ Entered into separate binding agreements with Nippon Steel and JFE Steel for the sale of a JV interest in the Blackwater mine of 20%
Slide 7: 2. Our markets
2. Our markets
Slide 8: Transformed to a metallurgical coal producer while maintaining HCV thermal supply
Whitehaven has transformed to a metallurgical coal producer while maintaining HCV thermal coal supply FY24 sales revenue1 Other Europe Europe 8% Japan India 5% 6% Korea Japan 7% Geography 50% 10% India Korea Malaysia 14% China Taiwan Taiwan Vietnam - Malaysia Sales revenue by coal type1 Indonesia Ne
Slide 9: Structural shortfalls forecast in seaborne high CV thermal and metallurgical coal
Structural shortfalls are forecast in seaborne high CV thermal coal and metallurgical coal markets Global supply & demand Global supply & demand 1 for 2 for 400seaborne high CV thermal coal (>5850 NCV) 400seaborne metallurgical coal Million tonnes 350 Million tonnes 350 300 139Mt 300 74Mt 250 250 20
Slide 10: Demand growth for metallurgical coal is largely underpinned by India
Demand growth for metallurgical coal is largely underpinned by India Asia seaborne demand for metallurgical coal1 (Mt) Recent Wood Mackenzie forecasts indicate: 350 Japan • ~29% growth in demand for seaborne metallurgical 300 China coal into Asia by 2050, with India to grow ~110%1 250 Taiwan • India
Slide 11: FY24 external market drivers
FY24 external market drivers Strong underlying demand continues to underpin good pricing outcomes for HCV thermal and metallurgical coal Supply and demand Pricing environment Costs, including regulatory • Robust HCC demand in FY24, • Strong metallurgical coal imposts while Russian sanctions indices
Slide 12: 3. FY24 operational results
3. FY24 operational results
Slide 13: ROM production and sales
ROM production and sales FY24 volume uplifts reflect operational improvements and acquisition of QLD assets Whitehaven managed ROM coal production (Mt) Whitehaven managed sales of coal produced (Mt) 24.5 19.5 First quarter 3.5 First quarter QLD 2.3 contribution QLD 1.3 16.0 0.9 contribution 18.2 3.5
Slide 14: NSW Operations – ROM production
NSW Operations – ROM production Strong production results from open cuts – Narrabri improving Managed ROM coal production (Mt) 8% year-on-year increase in FY24 ROM production reflects: 20.6 20.0 19.7 1.6 1.6 18.2 1.2 GOC rehab1 • Strong production from Maules Creek with 2.3 1.4 2.4 2.3 GOC operation
Slide 15: NSW Operations – FY24 overview
NSW Operations – FY24 overview Focus on continuous improvement, operating systems & discipline is delivering results Maules Creek • Exceeded ROM guidance • Ceased autonomous haulage (AHS) in March quarter to de-risk operations and support productivity improvements • Completion of mining in south-wes
Slide 16: NSW Operations – Vickery early mining update
NSW Operations – Vickery early mining update Producing the highest energy thermal coal in our NSW portfolio • Early Mining capital project safely delivered on-time • First coal production and sales delivered Q4 FY24 (~100k tonnes ROM in Q4) • Utilising surplus Gunnedah CHPP capacity and surplus port
Slide 17: QLD Operations – ROM production
QLD Operations – ROM production Strong QLD production following successful integration of Daunia and Blackwater ROM coal production (Mt) Safe and successful transition / integration Q4 FY24 ROM production from QLD of 4.8Mt: 20.0 • 3.6Mt from Blackwater and 1.3Mt from Daunia 18.0 17.6 17.4 • Broadly
Slide 18: QLD Operations – leadership & structure in place
QLD Operations – leadership & structure in place Senior appointments in place and operating model being established Ian Humphris – Chief Operating Officer • EGM – Operations since April 2020 Building an operationally • Appointed COO in June 2024 to lead transformed operations across the Gunnedah foc
Slide 19: 4. FY24 financial results
4. FY24 financial results —
Slide 20: FY24 financial overview
FY24 financial overview Underlying EBITDA $1,399m Transaction costs ($434m) incurred in the acquisition Transaction costs - $434m of Daunia and Blackwater include stamp duty Transition costs - $125m ($361m), legal fees, funding & due diligence activities. Other - $42m Stamp duty expected to be paid
Slide 21: Financial history
Financial history Solid results in FY24 with QLD contributing in Q4, following two record years Revenue ($m) Underlying EBITDA1 ($m) Underlying NPAT1 ($m) FY24 2,955 869 3,824 FY24 1,127 272 1,399 FY24 740 FY23 6,065 FY23 3,967 FY23 2,655 FY22 4,920 FY22 3,060 FY22 1,952 FY21 1,557 FY21 205 FY21 (87
Slide 22: Segment financial results
Segment financial results FY24 $m FY23 • NSW FY24 underlying NSW QLD1 Group2 EBITDA of $1.2b while Revenue 2,850 869 3,824 6,065 QLD contributed $272m of EBITDA in first quarter of Underlying EBITDA 1,158 272 1,399 3,967 ownership Depreciation & amortisation (246) (73) (319) (226) • From a underlyin
Slide 23: Sales mix and price realisations
Sales mix and price realisations Delivering growth benefits with 59% of annualised revenues from metallurgical coal (up from 6% in FY23) based on Q4 FY24, with further metcoal growth expected NSW QLD • NSW equity sales of produced coal1 of 13.2Mt • QLD sales of 3.2Mt reflect some slippage largely fo
Slide 24: Price, costs and margins
Price, costs and margins Healthy margins despite year-on-year moderation of coal prices FOB unit costs vs average realised price (A$/t) Solid average coal price realisations1 reflect strong underlying demand • A$228/t from Group in FY24 FY24 Group 120 24 228 • A$271/t from QLD in the Q4 • A$217/t fr
Slide 25: EBITDA margin
EBITDA margin Margins remain attractive with solid pricing and higher costs FY24 FY23 Coal sales Mt 16.4 13.0 (equity basis, excluding purchased coal) Average revenue A$/t 204 406 (excluding purchased coal & after applicable royalties) Average cost of sales A$/t 120 103 EBITDA margin on own coal sal
Slide 26: EBITDA ($m) FY24 vs FY23
EBITDA ($m) FY24 vs FY23 (before significant items) $m Achieved Prices FY24 FY23 QLD Average (US$/t) 180 - NSW Thermal (US$/t) 140 305 Overall (A$/t) 228 445 FX (2,693) AUD:USD 0.66 0.67 3,967 (9) (138) 272 1,399 FY23 Price (net of royalty) Costs QLD Other FY24 26
Slide 27: Cash flow: A$3.3b outflows in FY24 to acquire QLD assets
Cash flow: A$3.3b outflows in FY24 to acquire QLD assets ~A$1.6b inflow in FY25 through the 30% JV sell down of Blackwater $m 1,307 (1,017)1 (496) (392) (67) (3,308) 2,652 (1,278) 43 Net cash at Cash generated Income tax paid Capital Returns to Repayments & Daunia & Foreign Net debt at 30 June 2023
Slide 28: Net debt and liquidity
Net debt and liquidity $m 30 Jun 2024 30 Jun 2023 • Net debt position at 30 June 2024 of Cash on hand 405 2,776 A$1.3 billion after funding upfront payments for Daunia and Blackwater Credit facility (1,661) - through combination of cash and debt ECA1 (29) (39) • Available liquidity of $556m at year
Slide 29: Capital allocation framework
Capital allocation framework Disciplined capital allocation builds resilience and delivers shareholder value Operating cash flows 1 2 3 During deferred payment period for the Maintain & optimise Retain cash / maintain Return to shareholders acquisition, we expect to: operations balance sheet strengt
Slide 30: 5. FY25 guidance
5. FY25 guidance
Slide 31: FY25 guidance
FY25 guidance1 FY25 Guidance FY24 actual2 GROUP QLD NSW Managed ROM Coal Production Mt 24.5 35.0 – 39.5 17.6 – 19.7 17.4 – 19.8 Managed Coal Sales3 Mt 19.5 28.0 – 31.5 14.4 – 16.1 13.6 – 15.4 Equity Coal Sales3 Mt 16.4 25.1 – 28.3 14.4 – 16.1 10.7 – 12.1 Cost of Coal4 A$/t 120 140 – 155 Total Capex5
Slide 32: Whitehaven's focus areas
Whitehaven’s focus areas Transition, operational reliability and cost management Group NSW operations QLD operations • Integrate operations including • Deliver continuous improvement in • Focus on: alignment of structure with safety and environmental ─ Operational reliability and Whitehaven’s operat
Slide 33: Q&A
Q&A
Slide 34: 6. Appendices
6. Appendices
Slide 35: FY24 financials and FY25 guidance supporting slides
FY24 financials and FY25 guidance supporting slides
Slide 36: Costs
Costs Unit cost calculation The unit cost can be calculated off the face of the P&L. It includes operating expenses, selling & distribution expenses, administration expenses (net of sundry revenues) and share-based payment expenses. Coal purchases, royalties, depreciation & amortisation, FX and sign
Slide 37: Depreciation & Amortisation
Depreciation & Amortisation GROUP FY24 FY23 Drivers Depreciation & amortisation $319m $226m D&A per tonne (sales of own coal) $19/t $17/t NSW Depreciation & amortisation $246m $226m Reflects increase in ROM production at open cuts vs prior corresponding period D&A per tonne (sales of own coal) $19/t
Slide 38: Underlying finance income/(expense)
Underlying finance income/(expense) GROUP FY24 FY23 Drivers Underlying net finance income $85m $82m Underlying net finance expense ($107m) ($40m) Debt drawn in April 2024 Underlying net finance (expense)/income ($22m) $42m NSW Underlying net finance income $83m $82m Reduction of interest income from
Slide 39: FY25 guidance for D&A and net finance expense
FY25 guidance1 for D&A and net finance expense Recognising complexities associated with the treatment of the acquisition, the following guidance for FY25 is provided. These numbers are indicative only. FY25 indicative guidance GROUP NSW QLD Comments NSW broadly in line with FY24 Depreciation & amort
Slide 40: FY25 capital expenditure guidance
FY25 capital expenditure guidance Capex guidance reflects prudent allocation of capital FY24 FY25 ($m) Includes Actual Guidance • Open cuts fleet overhauls, sustaining capex • Legacy environmental compliance QLD Operational Assets 243 280 – 345 • Narrabri sustaining capex – 200 Series precinct NSW ~
Slide 41: About Whitehaven
About Whitehaven
Slide 42: Whitehaven's portfolio of operations in QLD & NSW
Whitehaven’s portfolio of operations in QLD & NSW Whitehaven is a leading Australian metallurgical coal producer and supplier of high-CV thermal coal Port of Hay Point Dalrymple Bay Terminal Daunia Blackwater NSW Queensland Blackwater RG Tanna Coal Terminal Maules Creek Narrabri Tarrawonga Blackwate
Slide 43: Narrabri
Narrabri Mining of longwall panel 203 to continue in FY25 • Commenced mining of 200 Series panels in FY24 • LW203 significantly improved in Q4 following inconsistent production earlier • Mining conditions & engineering indicate LW204 to provide improved production • Cut & Flit providing attractive m
Slide 44: Sustainability slides
Sustainability slides
Slide 45: Providing energy security for our customers
Providing energy security for our customers Our thermal coal provides a significant proportion of power generation to our major customer countries, totalling ~40 TWh in FY24 Contribution to baseload generation from WHC managed coal supplied to Japan, South Korea & Taiwan and Malaysia1 Japan Taiwan W
Slide 46: Producing the highest quality seaborne thermal coal
Producing the highest quality seaborne thermal coal 96% of our thermal coal exports in FY24 were >5600 kcal Percentage of thermal coal exports by quality1 100% 90% FY24 quality outcomes kcal/kg NAR2 80% • Average energy content of WHC’s 70% <4200 thermal production was ~6065 kcal 60% 4200 – 5000 and
Slide 47: Our coal is efficient when combusted
Our coal is efficient when combusted When combusted, more energy per metric tonne is generated than other thermal coals • Required feed rates for all Comparative coal feed rates (%)1 reference coals to deliver the same power output is higher than Whitehaven’s coal • Higher feed rates are required fo
Slide 48: Our coal is lower in emissions
Our coal is lower in emissions Demand for high quality, high-CV, low ash coal is increasing in efforts to reduce CO2-e emissions Coal-fired power plants – GHG emissions per MWh sent out1 • Whitehaven’s thermal coal is used in high-efficiency, low emissions (HELE) electricity generation including 42%
Slide 49: Greenhouse gas emissions
• Scope 1 emissions primarily from Narrabri Focused on Scope 1 and 2 emissions, fugitive emissions, Maules Creek diesel TCFD reporting and ASRS standards consumption and Blackwater fugitive emissions and diesel consumption in FY24 – Multiple fugitive emissions abatement projects underway and under i
Slide 50: Scope emissions by source
Scope 1 emissions by source Our Scope 1 emissions are predominantly fugitive emissions and diesel emissions Scope 1 emissions by facility1 FY24 Scope 1 emissions by source1 1,229 1,172 0.1% Other 17 11 - 43 54 73 28 910 190 k tonnes CO2-e 10 - 258 22 47 76 67 56% 44% 286 266 Diesel Fugitive consumpt
Slide 51: Strengthening diversity and contributing to communities
Strengthening diversity and contributing to communities 22.7%1 female employees and 10.6%1 19.7% in legacy business FY23: 17.3% of employees identify as Aboriginal 19.7%1 females in leadership roles and or Torres Strait Islander 21.1% in legacy business FY23: 14.1% FY23: 11.1% 37.5% females on the B
Slide 52: Whitehaven sentiment in the local community continues to improve
Whitehaven sentiment in the local community continues to improve Positive sentiment has increased over the past decade. Around half of those aware of Whitehaven were positive (51%) in 2023. Negative opinion is decreasing steadily (18%). 60 50 40 NET % 30 20 10 0 2014 2015 2017 2018 2020 2022 2023 Po
Slide 53: Coal price charts
Coal price charts
Slide 54: Thermal coal prices
Thermal coal prices1 gC NEWC1 showed resilience in FY24 at ~US$130-$140/t. Medium to long-term outlook remains supported by structural HCV supply shortfall. $500 $450 • gC NEWC averaged US$136/t in $400 FY24 (US$134/t in June 24) $350 • End user focus remains on longer $300 tenure procurement, parti
Slide 55: Metallurgical coal prices
Metallurgical coal prices1 PLV HCC was strong in FY24, averaging US$287/t. Sanctions on Russian coal drove PLV HCC and SSCC/PCI spreads in FY24. $700 $600 FY24 Index (USD) (average) $500 Platts PLV HCC 287 Platts LV PCI 171 $400 Platts SSCC 158 $300 • India’s emergence as an influence $200 on metall
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